The new question for AEC businesses: 'Growth at what cost?'
The "growth-at-all-costs" strategy is dead. The Asean Economic Community changes things for Asean businesses; those with leaner, agile supply chains, especially, will come out ahead.
WITH the Asean Economic Community (AEC) now defining trade relationships and agreements throughout South-east Asia, the region's businesses can no longer pursue a "growth-at-all-costs" strategy when it comes to regional trade. The region's economic growth shows little sign of reaccelerating in 2016, which means new rules apply for businesses seeking to expand their market share even as trade barriers fall and economic cooperation increases.
In particular, businesses of all sizes need to factor in the efficiency of their growth strategy: it is no longer enough to simply increase sales without also ensuring operations stay lean and agile.
This "new rule" applies the most to logistics and supply chains. For most businesses in Asia, supply chains are already stretched to breaking point - largely due to the breakneck pace of growth in the past few years, which typically focused on raw sales and revenues at the expense of logistical capacity.
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